After weeks of pressure from other EU members, German Chancellor Merkel relented on her austerity-only prescription and acquiesced to a stimulus package for the eurozone crisis.
Leaders of the eurozone’s four biggest economies – Germany, France, Italy, and Spain – agreed today to jumpstart growth of the besieged 17-member group with a roughly 130-billion-euro ($163 billion) package.
“I absolutely agree with what everyone else here has said – to devote 1 percent of the GDP of the European area additionally to growth, to efficiency in growth, and to investment,” German Chancellor Angela Merkel said in a press conference in Rome after the meeting.
The comments mark a turning point in discussions; until today, she resisted pressure from the other three countries to budge on her austerity-only recipe for exiting the crisis. The meeting, dubbed the “big four mini-summit,” was geared toward building consensus ahead of next week’s European Union summit. And while many of the details are still pending, the fact that Germany agreed to the French-proposed growth stimulus package is a good sign.
As Chancellor Merkel said herself, “That is the genuine signal that we need.” French President François Hollande also highlighted the breakthrough. “Who would have imagined a few weeks ago that [the issue of] growth would be on the agenda of [next week’s] summit?"